Fed Officials Reduce 2012 Unemployment Forecast to 7.8% to 8%

Federal Reserve officials reduced their forecast for unemployment after payroll gains averaged more than 200,000 a month during the first quarter, while policy makers affirmed a plan to keep the benchmark lending rate around zero at least through late 2014.

Officials forecast the unemployment rate would average 7.8 percent to 8 percent in the final three months of this year versus a forecast of 8.2 percent to 8.5 percent in January, according to central tendency estimates. The new forecasts are still far above policy makers’ estimates for full employment, which range from 4.9 percent to 6 percent.